We use cookies to customise content for your subscription and for analytics.If you continue to browse Lexology, we will assume that you are happy to receive all our cookies. For further information please read our Cookie Policy.

FCA final report on general insurance add-ons

In our last newsletter we reported on the provisional findings of the Financial Conduct Authority (FCA) on its market study into general insurance add-on products. The FCA has published its final report on the market study and has published its final findings that:

the add-on mechanism has a clear impact on consumer behaviour and often affects consumers' decision-making; and

many consumers are getting poor value and there is a lack of transparency and comparability about the value provided by general insurance products.

The FCA identified particular concerns about ineffective competition in the add-on GAP market and the majority of feedback received by the FCA focused on the GAP market.

The FCA has proposed the following remedies:

"a deferred opt-in" to impose a break between purchase of the primary product and the add-on GAP;

a requirement to tell the customer, if the GAP is offered at point of sale, that they can buy the product elsewhere and to provide information on how to shop around;

banning the use of opt-outs (for example, pre-ticked boxes);

improvements to how price comparison websites provide add-on options and pricing; and

a requirement to publish claims rations.

Consultation is to take place on the proposed remedies later on this year.

Compare jurisdictions:Insurance & Reinsurance

“I make an effort to read at least several articles each day and regularly share the particularly relevant or interesting articles with my colleagues. I greatly appreciate the inclusion of the Lexology service by the State Bar of Texas and have recommended that my friends and colleagues join the Corporate Counsel Section of the State Bar in order to obtain this service for themselves.”